PayPal
Australia has hit back at a ­
MasterCard
claim that its new MasterPass e-wallet is more secure and cheap­er for merchants to accept than PayPal.

Managing director Jeff Clementz said the online pay site had never had its information corrupted in the 15 years it has been operating.

The company is also moving on from being a way to pay online to using its customer transaction data to increase sales for its merchant clients.

“We’re entering a time when it is not about the next PayPal clone," he said.

“I see a lot of people stepping into the transactional space – we have nailed the transaction, [now] we are working with merchants to deepen their marketing and deepen their relationship with consumers," he said.

MasterCard chief financial officer Martina-Hund Mejean said earlier this month the company could have released MasterPass several years ago, but waited to make sure it gave equivalent security online as chip-card ­payments in person.

“We announced the tokenisation effort – replicating what we did with the EMV [standard] in the physical space, which the fraudsters can really not crack," she told The Australian Financial Review

“When you put in your card details that can be compromised. What the token does is that detail never gets to the merchant."

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But Mr Clementz said PayPal never revealed consumers’ financial information to merchants. “All we do is send the money and the shipping address."

Unique position in market

PayPal had “brought trust to e-commerce" and was “committed to protecting our 5.5 million active Australian account holders". The company has also introduced additional seller protection for all “tangible" products.

Mr Clementz said this will protect merchants against fraud or charge-backs if items are not delivered, as long as the merchant uses an approved tracking method.

He said PayPal is now rolling out “closed loop" offers in Australia where registered members of PayPal’s digital wallet get access to special offers.

Paypal was able to do this as it is in a unique position in the payments ­market, having direct relationships with both consumers and merchants.

That meant it could target offers to consumers that are likely to buy each seller’s products, Mr Clementz said.

“What’s just being rolled out now is the ability to put the money in the wallet," he said.

“So if you’re JB Hi-Fi, Kogan or Telstra, you could put $40 in the PayPal wallet and that could only be redeemed [with them] in the next two weeks."

Samsung’s new S5 phone soon to be released in Australia will come with ­fingerprint recognition technology.

Once a PayPal account holder registers their fingerprint, they will be able to pay without typing in their login email or password.

He also defended PayPal’s cost structure against MasterCard’s e-wallet.

“In some cases I imagine our rates will be favourable . . . and [sometimes] they may be slightly higher.

“We offer multiple forms of funding from American Express to debit and bank funding," he said.